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Last week, a top US official returned from a southern state displaying a small piece of metal, proclaiming it was the initial rare-earth magnet made in the US in a quarter of a century.

He indicated that this was a sign the US is breaking “China's dominance on our industrial pipeline.” Due to a recently opened rare-earth mineral processing center in South Carolina, the official continued, “America is reclaiming its self-sufficiency.”

Countering Beijing's Control in Critical Materials

Overthrowing Beijing's refining and production supremacy in these materials, which are vital for some semiconductors, energy storage, and armaments, is a top priority for the federal government. Via economic tools and other approaches, the US is relying on returning the industry home to American shores.

These measures led China to limit rare-earth exports to the US and motivated the administration to sign deals with Australia, a partner, another nation, and Japan.

While the US and China have since reached a temporary agreement on rare earths, Beijing—with approximately 70% of global mining and over 90% of global processing capacity—holds an advantage that will be difficult to overcome.

“Rare earths are used in electric motors but also in guidance systems that have clear uses for the military,” notes an industry expert. “Any device that has a strong magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reset its reliance on Chinese production of minerals critical to national security, chip manufacturing, and the shift from traditional energy to wind and solar. According to official sources, the US imported 80% of the rare earths it consumed in 2024.

In the case of rare-earth minerals such as a key element, used in chip production, and another mineral, essential to defense systems, Chinese refinement dominance rises to 99%. Dysprosium and terbium are found in magnets crucial to EV motors and power systems in wind turbines, along with applications for cellphones, high-intensity lighting, and energy plants.

Long-Term Efforts and International Resources

Initiatives to reduce the US’s dependence on China's output of rare-earth minerals may require a long time. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many reserves, including those in Eastern Europe, where an agreement was made earlier this year, are only in the initial phases of mining.

“It’s not that there’s a shortage per se, it’s that China can control how much is sent abroad,” an analyst said, adding that securing permits from China can be a lengthy, difficult process.

Greenland, another focus of American interest, and Brazil, are additional nations with significant rare-earth deposits. Domestically, there are reserves in California, Wyoming, and the central US, with the largest operational mine located at Mountain Pass, the state, about 60 miles from a major city.

Government Initiatives and Investment

Recently, the US Department of Defense took on the role of the major investor in a mining company, with intentions to open a new “integrated” plant, called a new facility, to produce magnets crucial for F-35 fighter jets, drones, and submarines.

In North America, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and additional millions in the northern neighbor—far less than the 44m tons estimated to be in the Asian giant.

Mirroring government funding in other sectors and US chipmakers, the federal agency announced it was ready to make targeted funding in strategic resource firms.

“The US is up against government-backed investment because China is picking these as priority areas that they want to invest in,” a cabinet member said during a address this spring.

The official suggested that the US could utilize a national investment pool to accelerate production. “Why wouldn’t the richest nation in the world have the biggest sovereign wealth fund?” he asked.

Past Challenges and Future Outlook

American attempts to promote homegrown output have floundered in the past when China lowered prices, making unsupported rare-earth development unprofitable against Asia's competitive pricing and long-term strategic outlook.

Five years ago, a market expert stated before a congressional panel that “those who invest in battery capacity and supply chains now are poised to lead this industry for the foreseeable future. There is still time for the US but immediate steps are required.”

Five years on, a race to assemble international partnerships around rare earths is accelerating.

“Soon, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” the President told the media. This followed in the wake of a request for compensation in the form of minerals from Ukraine. More recently, the authorities in Asia agreed to a deal with an American company, giving it access to minerals such as antimony and copper.

Prospects for Success

However, can the US make up its shortfall and weaken China’s hold on rare-earth global networks? “America has implemented really significant steps already,” a specialist says. The nation, he adds, is unlikely to become “self-reliant in the near future because it requires years to bring a mine online and build refining capacity.”